News from Washington: Regulatory Updates
The Consumer Financial Protection Bureau (Bureau) issues final policy guidance about modifying loan- level data under the Home Mortgage Disclosure Act (HMDA) before releasing it to the public. 
On January 31, 2019, the Bureau issued final policy guidance to explain how it will make 2018 HMDA loan-level data available to the public. The Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank Act) amended the HMDA in 2011 to add new data fields.
In 2015, the Bureau issued a final rule to implement the statutorily required data fields and to use its discretionary authority to add additional fields. Some of the new fields contain sensitive information such as an applicant’s credit score. The Dodd–Frank Act requires the Bureau to balance the benefits of disclosure to fulfill HMDA’s purposes against potential privacy risks and to modify the data set accordingly before releasing it to the public.
After conducting this analysis, the Bureau intends to either withhold or modify certain HMDA data before releasing them to the public as follows. The Bureau will not release the following 2018 loan-level data to the public:
- universal loan identifier or nonuniversal loan identifier;
- date the application was received or date shown on the application form;
- date of action taken by the financial institution on a covered loan or application;
- address of property securing the covered loan or, in the case of an application, proposed to secure the covered loan;
- credit score or scores relied on in making the credit decision;
- unique identifier assigned by the Nationwide Mortgage Licensing System and Registry for the mortgage loan originator; and
- results generated by the automated underwriting system used by the financial institution to evaluate the application.
The Bureau will also exclude free-form text fields used to report the following data:
- applicant or borrower race;
- applicant or borrower ethnicity;
- the name and version of the credit scoring model used;
- the principal reason or reasons the financial institution denied the application, if applicable; and
- the automated underwriting system name.
In addition, the Bureau will only release a range of values for certain data fields:
- loan amount;
- applicant age;
- debt-to-income ratio;
- value of property securing the loan; and
- number of individual dwelling units related to the property securing the loan.
This policy guidance, which is nonbinding and does not impose any compliance obligations on covered institutions, applies to the HMDA data that financial institutions collected in 2018 and reported in 2019. The guidance states that the Bureau will engage in formal rulemaking in 2019 concerning its treatment of loan-level data released to the public for HMDA data collected in 2019 and beyond, based in part on its experience with this guidance.
The Board of Governors of the Federal Reserve System (Board) and the Consumer Financial Protection Bureau (Bureau) announce dollar thresholds in Regulations Z and M for exempt consumer credit and lease transactions.
On November 23, 2018, the Board and the Bureau published dollar thresholds that will apply under Regulation Z (Truth in Lending Act (TILA)) and Regulation M (Consumer Leasing Act) for determining exempt consumer credit and lease transactions in 2019. The annual adjustment is based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If the CPI-W has not increased, the Board and the Bureau maintain the exemption threshold from the prior year.
Transactions at or below the thresholds are subject to the protections of the regulations. Based on the annual percentage increase in the CPI-W as of June 1, 2018, the protections of TILA and the Consumer Leasing Act generally will apply to consumer credit transactions and consumer leases of $57,200 or less in 2019. Note, however, that private education loans and loans secured by real property (such as mortgages) are subject to TILA regardless of the loan amount.
The Board and the Bureau issue a joint rulemaking proposal under the Expedited Funds Availability Act (EFAA).
On December 10, 2018, the Board and the Bureau published a proposal under Regulation CC, which implements the EFAA to adopt a calculation methodology to make inflation adjustments to the dollar amounts that depository institutions must make available to their customers under the EFAA, as required by the Dodd–Frank Act. Under the proposal, dollar amounts in the EFAA and Regulation CC would be adjusted by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers rounded to the nearest multiple of $25, effective April 1, 2020, and would be readjusted every five years.
The proposal also would implement a provision in the Economic Growth Regulatory Relief and Consumer Protection Act (EGRRCPA) that expands the application of the EFAA and Regulation CC to American Samoa, the Commonwealth of the Northern Mariana Islands, and Guam. Finally, the proposal solicits additional comments on amendments the Board previously proposed in 2011 regarding funds availability schedule provisions and associated definitions. The comment period closed on February 8, 2019.
The Bureau issues its fall 2018 regulatory agenda.
On October 17, 2018, the Bureau released its fall 2018 agenda, consistent with the Regulatory Flexibility Act. The agenda includes rulemaking in the following areas:
- Implementing an amendment in the EGRRCPA to expand an exemption from the mandatory five-year escrow requirement for higher-priced mortgage loans under the TILA
- Drafting implementing regulations for the Fair Debt Collection Practices Act (FDCPA) concerning communication practices and consumer disclosures (the FDCPA does not have any implementing regulations at this time)
- Reconsidering the 2017 final rule for payday, vehicle title, and certain other high-cost loans; the rule currently has an August 2019 compliance date, and the Bureau expects to issue a rulemaking proposal prior to this date.
Update: On February 14, 2019, the Bureau issued a rulemaking proposal that would rescind the requirement that creditors verify a borrowers’ repayment ability before issuing a payday, vehicle title, or longer-term balloon payment loan and postpone the current August 19, 2019, compliance date to November 19, 2020. The proposal would not change requirements in the final rule prohibiting payday lenders from attempting to clear a consumer’s payment after two failed attempts and requiring notice to consumers before attempting to cash a check the first time. The comment period closed on March 18, 2019.
The Bureau issues an interim final rule to amend two model forms under the Fair Credit Reporting Act (FCRA) to implement provisions of the EGRRCPA.
On September 18, 2018, the Bureau issued an interim final rule to revise two model forms required under Section 609 of the Fair Credit Reporting Act (FCRA).
The rule amends two FCRA disclosures — the Summary of Consumer Identify Theft Rights (Appendix I to Regulation V) and the Summary of Consumer Rights (Appendix K to Regulation V) — to add the new notice of rights required by Section 605A(i)(5) of the FCRA, a new FCRA section added by the EGRRCPA. The rule also amends the current Summary of Consumer Identify Theft Rights to reflect a change to the minimum duration of initial fraud alerts from 90 days to one year in the EGRRCPA.
In addition, the Summary of Consumer Rights is amended to update contact information for certain FCRA enforcement agencies. The interim final rule also provides that the use of prior versions of the model forms published in Appendices I and K on November 14, 2012, will continue to comply with the FCRA if a separate page containing the additional required information is provided in the same transmittal.